Events to Look Out for Next Week

Andria Pichidi

August 18, 2023

The agenda is packed with data that the central banks will be watching, while focus will be on the Jackson Hole Symposium and the fifteenth BRICS summit of the group of major emerging economies which will be held in Johannesburg from Tuesday. The calendar also includes mainly US data releases, such as Existing Home Sales, New Home Sales, Durable Goods and Michigan Sentiment. However, ongoing concerns, about the inflation outlook, China jitters and further Fed tightening undermining confidence in a soft landing in the US, are expected to continue weighing on confidence.

Tuesday – 22 August 2023

BRICS Summit (Day 1)
New and Existing Home Sales (USD, GMT 14:00) – The existing home sales are expected to fall -0.5% in July to 4.140 mln from 4.160 mln in June and 4.300 mln in May. We saw a 14-year high of 6.65 mln in January of 2021. In Q3, we expect an average sales pace of 4.147 mln, after a 4.250 mln rate in Q2. The month’s supply of homes should rise to 3.2 in July from 3.1, versus a deep all-time low of 1.6 in January of 2022. The median sales price is expected to fall to $407,000 from $410,200 in June, versus an all-time high of $413,800 in June of 2022.

Wednesday – 23 August 2023

BRICS Summit (Day 2)
Markit PMIs (EUR, GMT 07:30-08:00) – The prelim. Eurozone & Germany Services for August are expected to decline slightly with the Manufacturing sector however still in contraction, leaving the Eurozone S&P Global Composite PMI at 48.4 from 48.6.
Markit PMIs (GBP, GMT 08:30) – The UK CIPS Manufacturing PMI fell to 45.3 in Juy. A slightly better report than the 45.0 reported initially, but still the lowest reading in seven months and the joint-weakest since May 2020. The survey suggests that the contraction in activity accelerated again, although despite the difficult situation at the moment, manufacturers remain optimistic about the future and around 53% reported that they expect output to rise over the coming year.
Markit PMIs (USD, GMT 13:45) – August prelim. Services PMI in the US is expected unchanged.
New Home Sales (USD, GMT 14:00) – New home sales are expected to rise 0.4% to a 700k pace from 697k in June after 715k in May, versus a 6-year low pace of 543k in July of 2022. We expect a 702k Q3 pace for new home sales, after a 694k Q2 rate.

Thursday – 24 August 2023

BRICS Summit (Day 3)
Jackson Hole Symposium (Day 1)
Durable Goods (USD, GMT 12:30) – Durable Goods orders are expected to fall -5.6% in July with a -15.0% transportation orders decline, after a 4.6% headline rise in June that included a 12.0% transportation orders increase. Durable orders ex-transportation are pegged to rise 0.2%, after a 0.5% June gain. Defense orders are expected to rise 5.1%, following a -17.1% June plunge. Boeing orders fell back to 52 planes after a 9-year high of 304 in June, with a lift that month from a 220-plane order from Air India previously announced in February, and a big Riyadh Air order from the Paris Air show. The vehicle assembly rate in July bounced to an 11.9 mln pace from 10.9 mln in June. Durable shipments should rise 0.9%, and inventories should remain unchanged. The I/S ratio should tick down to a 2-year low of 1.83 from 1.84 the prior two months, versus an all-time high of 2.49 in April of 2020 for a series extending back to 1992.

Friday – 25 August 2023

Jackson Hole Symposium (Day 2)
IFO Business Climate, Assessment & Expectations (EUR, GMT 08:00) – The German IFO Business Climate is forecasted to fall to 86.7 in August down from 87.3, with Business expectations a bit optimistic, at 83.7 from 83.5.
Michigan Sentiment (USD, GMT 14:00) – The revised Michigan Sentiment report is expected to reveal no change to the preliminary headline drop to 71.2 from the 2-year high of 71.6 in July, versus an all-time low of 50.0 in June of 2022, an 88.3 cycle-high in April of 2021, and an early-pandemic bottom of 71.8 in April of 2020. We’ve seen an erratic updraft in the confidence indicators since mid-2022, though all of the measures have deteriorated sharply from mid-2021 peaks. All the surveys face headwinds from elevated mortgage rates, tightening credit conditions, and ongoing recession fears.

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Andria Pichidi

Market Analyst

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